For some, the Chancellor’s recent Spending Review was a flicker of hope in the dwindling flame of public opinion. For others though, there is a real scepticism on how this additional funding will be delivered, and who will be picking up the bill.
Regardless of political colour, one thing is clear: housing got the attention it desperately needs.
Rachel Reeves unveiled a substantial £39bn commitment to the Affordable Homes Programme – outstripping even the £29bn pledged to the NHS. It’s a bold signal from the Treasury and arguably the most significant funding announcement for housing in a generation.
On paper, it’s a solid step. The Affordable Homes Programme represents a concerted effort to address affordability and accessibility. An additional £10bn funnelled through Homes England to attract private investment further sweetens the deal.
Funding as a piece of the pie
The housing industry is united on one thing: investment matters, but without meaningful planning reform, its impact will be limited. Local planning authorities remain chronically under-resourced and overstretched.
Without the personnel, capacity and governance required to process applications and deliver projects, the very developments this funding is meant to support could well be bogged down in bureaucracy.
We can’t just throw tens of billions of pounds at the problem. We need a functioning planning system, one that is agile enough to unlock land, green-light viable projects, and support SME builders who are often the first to be frozen out when local systems become overstretched.
Developers are watching closely. This kind of financial commitment from the government sends the right message – but if the foundations of the system remain weak, the whole house will come crumbling down.
Support for buyers
On the demand side, buyers need more than just pledges and promises, they need the tools to be able to buy. The extension of the Mortgage Guarantee Scheme is a welcome move and keeps that arrow in a lender’s quiver. But with inflation remaining high and expectations for interest rate cuts now shifting, many aspiring homeowners still feel locked out of the market.
While borrowing remains expensive – especially for those seeing large amounts of their income go towards rent, we have seen positive momentum on rates and innovation from lenders. Most recently, we saw the introduction of a new 100% mortgage from April Mortgages, these options still need to be more widely available and better communicated to consumers.
Affordability remains the elephant in the room. The Spending Review may give the supply side a shot in the arm, but if demand remains stifled by borrowing constraints and ongoing cost-of-living pressures, consumer appetite will struggle. And if buyers are not able to buy, developers won’t build. It’s that simple.
Looking ahead
The headline numbers are promising. A 2.3% increase in departmental budgets through 2028-29, £39bn earmarked for affordable homes, and serious investment aimed at boosting supply all show a clear policy direction.
But now the real challenge begins.
We need swift action to streamline planning, bolster regional offices and empower local leaders. We need continued innovation from lenders. And we need the government to support not just construction, but the people who want to live in these homes – whether that’s through growing shared ownership, increasing first-time buyer support, or tax reform.
This Spending Review laid some financial groundwork for recovery in the housing market. But unless we see real structural change to match, we risk building castles on sand.
John Doughty is chapter managing director at Just Mortgages
